CIO-SP4 just gave contractors 50 billion reasons to consider the SBA Mentor-Protege program

It is not a revelation to anyone in the IT government contracting universe that the National Institutes of Health Information Technology Acquisition and Assessment Center (NITAAC) released its solicitation for the long awaited Chief Information Officer-Solutions and Partners 4 (CIO-SP4) Government-Wide Acquisition Contract (GWAC). The five-year IDIQ contract will have a five-year optional period and a $50 billion contract ceiling, sunsetting its predecessor (CIO-SP3) early next year.  Much of that money will go to IT-focused firms targeting the departments of Defense and Health and Human Services, but the RFP has important implications for contractors of all sizes in virtually every industry.

But one interesting point was that the new vehicle appears to be a not-so-subtle endorsement of the joint venture teaming arrangement that is one of the focal points of the SBA’s Mentor-Protege Program.

Specifically, the RFP states in Section A.1 that the intent is to increase participation with small business contractors. Large businesses have their own pool of awards (albeit smaller); however, they are able to compete on a small business CTA team (in a small business pool) if the large business has been accepted into the SBA’s Mentor Protege Program with a protege. Specifically, in Section L.3.7.2 (11):

Small Business CTAs: To be considered a small business, the other members of the CTA must all be small businesses, some other socioeconomic category of a small business, or an other than small business that has an SBA-approved mentor-protégé agreement with the eligible socio-economic business whose status the CTA is relying upon to compete for award. A FAR 9.601(1) CTA that is not a joint venture must demonstrate that at least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the prime contractor/team lead.

This could be a win for everyone.

 Joint venture advantage

So, what is the SBA Mentor Protege Program?

The SBA Mentor Protege Program (MPP) is a business development agreement under which one business provides another business with developmental assistance, with the approval of the SBA.

The benefits for the protege are that it allows the protege to pursue larger projects that it would not otherwise be able to pursue and win on its own by utilizing the mentor’s past performance and capacity. It can also slingshot a smaller company’s speed of success in the federal market by having them work closely with a larger, more experienced company in the federal space.

The benefits for the mentor are the ability to bid on contracts that have different set asides, greater work share (up to 60% in the joint venture), and the exclusion from affiliation. It also allows larger companies to have a trusted partner that they work with over three to six years (length of the MPP) instead of one contract. This can reduce the risk of working with smaller companies that they don’t really know.

And thanks to new SBA rules implemented last November, any relevant prior projects completed by the mentor firm can be included in the past performance record of the joint venture as a prime, whether or not the protege was involved (although look for more clarification on this in the coming months). Once on the vehicle, the joint venture arrangement allows small businesses to inherit the capabilities and resources of the larger partner, making them significantly more competitive.

The program is also growing more popular as more companies recognize the significant advantage that it can offer both the mentor and the protege. Last month, the large public relations firm Ogilvy had its MPP relationship with the woman-owned small business EFK Group highlighted in MSN.

What’s next?

We still have several other big GWACs on the horizon, so it’s quite possible that contractors will have even more reasons to pursue joint venture arrangements through the SBA Mentor Protege program in the near future. And if this $50B CIO-SP4 GWAC is any indication of what’s to come, firms should consider this when planning for upcoming acquisitions.

Tommy Benz is a principal at GrowthLab and works with professional service firms on their growth strategies in the federal market.

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